Group suspected of falsifying records to retake homes


Published: Friday, April 30, 2010 at 1:00 a.m.
Last Modified: Friday, April 30, 2010 at 12:21 a.m.


The Florida Attorney General’s office is investigating whether one of the state’s largest foreclosure firms is using fabricated or misleading documents to retake properties.

The civil investigation into Florida Default Law Group in Tampa became public on the Attorney General’s website Thursday, stating that it appears the firm presents faulty bank paperwork in thousands of foreclosures each month.

“These documents have been presented in court before judges as actual assignments of mortgages and have later been shown to be legally inadequate and/or insufficient,” the website states.

The Herald-Tribune first cast light on Florida Default Law Group last year with reporting on foreclosures in Sarasota County, where attorneys for lenders reportedly gave false statements in court about who owns mortgages or whether they have completed all the legal steps to put a foreclosed house back on the market.

Florida Default Law Group handled the case of Betty Kellogg, a 71-year-old disabled widow, who twice had her villa put up for foreclosure sale after an attorney misrepresented facts to a judge, even though she worked out a settlement with her lender.

Foreclosure defense attorneys who have long complained about false documents in Florida foreclosure cases said judges should pursue claims of possible wrongdoing.

“You see all these documents time and time again which on their face are not possible,” Tampa attorney Matthew Weidner said. “The judges cannot just ignore this. They cannot ignore blatant fraud in front of their faces.”

The Attorney General’s office opened its investigation into Florida Default in October, but it only became public after the target of the investigation was told about it.

The Attorney General can file a lawsuit against the company if it finds wrongdoing, seeking sanctions like fines or injunctions to stop the behavior.

Twelfth Judicial Circuit Chief Judge Lee Haworth said news of the investigation could prompt judges in Sarasota and Manatee counties to look more closely at filings.

But Haworth said the judges do not have the ability to check documents as thoroughly as they would like.

“I would be very skeptical they’re the only ones,” Haworth said of the Florida Default Law Group investigation. “Our anecdotal experience are it’s pretty widespread.”

But most homeowners abandon their property without a fight, leaving the attorneys for lenders unopposed when presenting information to the judge to retake properties.

An independent expert conducted a survey of Sarasota County foreclosure cases and found that three out of four cases proceeded with incomplete or improper documentation.

This is not the first time Florida Default Law Group has been in trouble for the documents it files in court. A judge in Miami fined Wells Fargo bank $95,000 late in 2008 because of sloppy paperwork filed by Florida Default Law Group, saying the firm seemed to believe that “filing any old pleading without undertaking any investigation into its accuracy is perfectly acceptable practice.”